Members are reminded that whether they employ an agent or not, under current legislation, it is the landlord who is responsible to ensure that all paperwork is in order. Yes, this is illogical – you employ a professional to handle the paperwork, as it is so hard to comply given the huge amount of landlord focussed legislation we have to live with, and when the professional screws up it is you who foots the bill.
What Happened In This Case?
This particular case concerns an NRLA member with property in Southampton which was managed for her by one of the local Countrywide subsidiaries. (There are 58 Countrywide subsidiaries - see attached. https://www.countrywide.co.uk/corporate/who-we-are/brands/
Mann and Co, Cryers Lettings, Austin Wyatt, APW lettings, Regal Lettings etc ).
The issue is that all of the subsidiaries use the Countrywide head office to process their administration, including tenancy deposits.
The member said, "I need to advise you about a Deposit Claim and Countrywide who have failed to protect me and thousands of landlord re the Tenants Deposit.
In my case although the Deposit was protected by Countrywide within 3 days, Countrywide appear to have no proof that it was posted to the tenants apart from their internal system. So my ex tenants Solicitors are making a legal claim against me.
This is the standard process by Countrywide they do not obtain proof that it has been posted. I am not a one off.
I have already been advised by a Solicitor recommended by the NRLA that a Court case will cost me £12,000 to fight this and to make a claim against Countrywide. Let alone my tenants legal fees and compensation. My ex tenants solicitors are demanding just over £9000.
If these Solicitors prove the case then thousands of landlords are going to be affected by this. I suspect these Solicitors rub their hands when they see Countrywide was involved in the Deposit. "
We have warned before about ambulance chasers (And in Other News (July) - PDPLA News) and this appears to be one more case of a disreputable solicitor who sees easy money going after a generic case with a large provider. On paper, each landlord should only be liable for 'up to 3 times the deposit' but we are sure there are a few who settle for substantially higher sums, having been frightened by the initial claim.
We did ask Countrywide for comment but they declined to do so.
What Can You Do?
If you must use a letting agent, make sure they belong to one of the professional bodies that regulate the industry, such as ARLA. Make sure they are members of the property redress scheme. And finally, make sure they are professionally trained – a minimum of CIH level 3.
With big companies, like Countrywide, they are bound to meet all of these criteria but you need to confirm adequate skills in the specific staff you deal with and the office you work with. CIH level 3 should be mandatory, in our view, for public facing jobs- viewings, management, signing agreements and directors / office managers should be level 4.
Level 4 FARLA?
The PDPLA have always championed the need for letting agents to be properly skilled. Our own vice chair, Alwin Oliver is one of only 4 letting agents in Portsmouth to have achieved the ARLA level 4 qualification (comparable to CIH level 4) – so if proposed legislation mandating such training comes into force, there will be many letting agents locally that will have to close.
Alwin said, "If implemented, with so few agents at present with level 3, never mind level 4 there will be many agencies closing, merging or getting taken over.
My personal guestimate is around 60% to 70% of the people now working in the industry will leave, many more will step up or at least try to, and many small agents will either be merged or sell. As I understand it, just 6 candidates managed to complete level 4 in lettings last year.
As to the levels being pretty modest, I tend to agree but we have to start somewhere and look at what happened to Nursing when they took it from, in effect an apprenticeship to a degree profession at the turn of the century, 3 years later we were hiring nurses from the Philippines to make up the shortfall. If I am right about the impact level 3 & 4 is about right and not too onerous but sufficient to clear out some of the shoddy practices that we have seen and advised on over the years. It is a step towards the industry becoming a profession, if not the full journey
I also think that the weekend course rent to rent and other sundry want to be agents and percentage players will not survive
For landlords, as we have said many times before, the cheapest headline rate is not the best deal. Many agents use low percentages to hide larger fees for referencing, signing agreements and so on
Trading standards require that fees are shown in full in an office and on websites but this is not always done. Clear information on fees and qualifications of the agency staff should be top of the shopping list, not a loss leading percentage figure for management"
Read This If Nothing Else
Final advice from Alwin:
If a landlord (or an agent acting on their behalf) fails to protect a deposit and a legal claim arises, as in this case, it is important that the landlord takes advice and acts quickly.
The Localism Act 2011 introduced a modest change to the legislation giving the court discretion to award UP TO 3 times the amount of the deposit and can take into account the degree of negligence or disregard on the part of the landlord (the claim from an ambulance chaser will always be for the full amount). This case law write up illustrates the point well; https://www.streathers.co.uk/statutory-compensation-for-failure-to-protect-tenancy-deposits/
A landlord would in a similar case want to take advice on both joining the agent as a co-defendant and also a complaint to the relevant ombudsman scheme. The key point is not to give up and pay up but go into damage limitation mode if you are unlucky enough to get caught.
But the real tragedy in this case is, had the agent used electronic signature software for both the tenancy (with prescribed information attached) and sent a copy of the deposit protection certificate the case would not have arisen, even if the DPC remained unsigned, proof that it has been sent would probably have been sufficient and should be a standard office procedure.
Written & oral information and advice from the Portsmouth & District Private Landlord's Association is given in good faith, but no responsibility whatsoever is accepted by the Association or it's officers for the accuracy of it's information & advice nor shall the Association be held responsible for the consequences of reliance upon such information.